Financing Transit-Oriented Development With Land Values : Adapting Land Value Capture in Developing Countries

Cities in developing countries are experiencing unprecedented urban growth. Unfortunately, this is often accompanied by the negative impacts of sprawl as a result of rapid motorization such as congestion, air pollution, greenhouse gas emissions, inefficient use of energy and time, and unequal accessibility. As these cities are often under severe fiscal constraints, they face great challenges in financing capital-intensive mass transit systems to reverse the course of these negative trends. Development-based land value capture (DBLVC) financing schemes being practiced in Asian megacities like Hong Kong SAR, China, and Tokyo have helped them not only to generate funds for transit investment and operational and maintenance costs but also to promote sustainable urban development through transit-oriented development (TOD). Many rapidly growing cities in developing countries have the conditions for introducing DBLVC – namely, strong economic growth, rising real incomes and increased motorization and congestion levels – all of which cause land value appreciation within proximity of transit stations or corridors. If adapted well to local contexts, DBLVC schemes have great potential to become an important strategic apparatus of urban finance and planning for cities in developing countries. Through a careful analysis of various case studies, this book provides strategies, policies, and methodologies that policy makers and practitioners can apply in developing their own DBLVC schemes for transit financing.

What the literature has long been missing is a thorough, thoughtful book that translates how to move land value capture from the ivory towers of theory to real-world implementation. This book comes as close to any in achieving this. It shows that land value capture holds tremendous untapped potential as a viable and sustainable funding source for public transit improvements and leveraging transit-supportive growth, particularly in developing cities. --Robert Cervero, Friesen Chair of Urban Studies and Professor of City and Regional Planning, University of California, Berkeley

This book will help cities in emerging economies, and those of us working with them, to tap into the increases in land value resulting from the economic development stirred by public investments in infrastructure, providing opportunities to finance further public investment in infrastructure in a virtuous cycle. This provides finance but also helps structure more sustainable cities through complementary land use regulations, furthering the virtuous cycle of financial, environmental, and social sustainability. --Holger Dalkmann, Acting Global Director, Transport and Cities, and Director, EMBARQ, World Resources Institute

What a timely and important book! It makes an impressive contribution to urban planning literature, bridging theory and practice in transit-oriented development and offering much needed practical advice on how to structure and execute land value capture mechanisms to finance infrastructure investment. It is invaluable for all city planners and public investors, providing pragmatic guidance based on thorough analysis of successful efforts in Hong Kong [SAR, China] and Tokyo and emerging efforts in places like São Paulo, Nanchang, and Hyderabad. Bravo! --George W. McCarthy, President and CEO, Lincoln Institute of Land Policy